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Ethics Scenario #25: Save the Kids Foundation

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25. Carl, the sole proprietor of a professional fundraising company, approaches the “Save the Kids Foundation with a proposal to rescue the organization from its near fatal experience whereby it lost its entire endowment of $10 million in the Madoff pyramid scandal. Carl proposes to raise at least $5 million for the Foundation within the next two years, and agrees to not require any fee other than a flat 10% of the amount he raises beyond out-of-pocket expenses that are agreed to by his client in advance.

a. Is this proposal by Mr. Plansky ethical?

b. Is this proposal legal?

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